Pensions Investment

Driven by widening credit spreads, greater volatility and higher gilt yields, the general acceleration of journey plans has resulted in pension funds' investment strategies becoming increasingly complex. Many schemes targeting buy-out are having to rebalance their investment portfolios far faster than originally anticipated to benefit from improved insurer pricing. Schemes targeting low dependency are considering how to implement cashflow-matching strategies which provide the desired returns whilst limiting risk to acceptable levels. As a further overlay to this already complex landscape, government interest in the deployment of pension fund assets is only increasing; while trustees and sponsors alike are seeking to understand the immediate and longer-term impacts of the new legislative and regulatory pension funding framework. Against this backdrop, pension funds' investment strategies are becoming increasingly complex, diversified and sophisticated.

Our clients include the trustees and sponsors of pension funds with over £100 billion of assets, as well as major players in local government infrastructure pooling and we have witnessed first hand how pension fund investment strategies have evolved in recent years.

The growing trend for sophisticated investment strategies and diversified asset portfolios requires a broad spectrum of legal advice, delivered by lawyers with an acute awareness of the unique concerns and perspectives of pension fund trustees and sponsors. As a full-service law firm, we are able to advise our clients on all aspects of their investment strategies. In addition to our dedicated pensions lawyers, we frequently work with colleagues from our market-leading Financial Services and Markets, Derivatives and Structured Products, Funds, Secondaries and Tax practices.

Our pensions investment specialists advise on all aspects of pension investment strategies, including:

investment management agreements (IMAs) and the associated investment guidelines for all forms of segregated, fiduciary (including the associated tender processes) and OCIO mandates;
liability driven investment (LDI) strategies (including pooled LDI funds and segregated LDI mandates);
preparing for endgame transactions such as buy-ins, buy-outs and longevity swaps and the associated asset transfer arrangements;
secured and unsecured borrowing arrangements (either between the sponsor and the pension fund or the pension fund and a third party lender);
investment arrangements underpinning sponsor covenant support packages;
insurance-wrapped investment policies;
fund investments (regulated and unregulated, long-only, private equity and venture capital, infrastructure, debt, real estate, structured finance, hedge funds and listed funds) and secondaries transactions;
derivatives for risk management purposes, repo and securities lending;
custody, clearing and collateral management arrangements;
ESG considerations; and
the impact of associated regulation.

In addition, our market-leading work for other financial market players (including asset managers, insurers and private capital funds) gives us an unrivalled perspective from which to advise our pensions clients. Despite this, we rarely run into conflicts.

We provide specialist advice on how pension schemes can respond to developing law and practice relating to ESG and sustainability. For more details, please visit our Sustainable Business Hub.

Industry appointments

As well as our pensions industry appointments we are appointed to a range of industry groups and bodies in the investment market, including:

Chairing the Investment and DC Sub-Committee of the Association of Pension Lawyers (APL).
The Alternative Investment Management Association (the trade association for hedge funds), including membership of the OTC Derivatives Working Group.
The International Swaps and Derivatives Association (ISDA).
The International Capital Markets Association (ICMA).
The International Securities and Lending Association (ISLA).
The Society of Pension Professionals' (SPP) Investment Committee.
The Financial Markets Law Committee (FMLC) Insurance and Pensions Scoping Forum.
The UK DB Working Group.
The Global Alliance of Impact Lawyers (GAIL).
Chairing the Regulatory Committee of the British Private Equity and Venture Capital Association (BVCA), which represents both general partners and limited partner investors.
The UK sustainable investment and finance association (UK SIF)

See our full list of industry appointments.

Advising the trustees of BAE Systems Pension Schemes on its OCIO (the outsourcing of investment management) of approximately £23bn of pension scheme assets to Goldman Sachs Asset Management (GSAM).
Advising a very large pension scheme on its OCIO of pension scheme assets to Legal & General Investment Management (LGIM) and its subsequent buyout process.
Advising a very large pension scheme on a material secondaries disposals programme in advance of its de-risking exercise.
Advising the Willis Pension Scheme on a £1.3bn longevity hedging transaction with Munich Re via a Guernsey based Captive Insurance Company fully owned by the Scheme.
Advising the trustee of a well-known insurance firm’s pension scheme on the establishment of the Trustee's FCA-authorised investment subsidiary in order to implement a new investment strategy for the Scheme's c.£4bn of assets.
Advising Nest on the acquisition of a ten percent shareholding in Industry Super Holdings, the holding company of IFM Investors.

Advising Nest on the establishment of its in-house investment function (Nest Invest), the transition of fund administration provider to Northern Trust and its ongoing investment programme including its new investment in the UK build-to-rent sector in partnership with Legal & General and PGGM, an evergreen timberland fund managed by JPM/Campbell Global and the £600 million private equity partnership with Schroders Capital.
Advising the Trustee of the Clara Pension Trust (as conflicts counsel, advising alongside CMS) on the appointment of Kempen Capital Management as its fiduciary manager, as part of a joint investment strategy on behalf of both the Trustee and Clara-Pensions.
Advising the Pensions Infrastructure Platform (PiP) established by PLSA and certain leading UK pension funds to encourage more UK infrastructure investments. This has included advising on PiP's internal structure and FCA approval, advising on the fundraising of PiP’s first dedicated fund (PiP Multi-Strategy Infrastructure LP) and advising on structuring requirements for PiP’s ongoing investment activity.
Advising GLIL Infrastructure LLP in relation to its further fund-raising round, which has increased its total deployable capital to £1.275billion.
Advising several multi-£billion schemes on the negotiation of IMAs, ISDAs, GMRAs, clearing, collateral and security documentation.